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Why Even Small Businesses Need Cyber Liability Protection

Do you think your business is so small that it is safe from cyber-attacks? No matter how small your business, if you have a computer and a customer list, you are vulnerable to being hacked. Most hackers in this day and age realize that larger organizations are taking every means possible to protect themselves and their customer data with sophisticated software tools and resident IT experts. So hackers have set their sights on smaller, more vulnerable organizations.

A 2017 survey by Manta revealed that 87 percent of small-business owners do not believe they are at risk for a cyber-attack. Most of these businesses don’t have any dedicated information technology personnel, and many don’t have even simple means of protection in place, such as anti-virus software, firewalls, spam filters, or data-encryption technology.

Yet the problem is far from hypothetical. Research by the National CyberSecurity Alliance shows that at least half of all cyber-attacks now target small businesses, defined as those with fewer than 250 employees. Even more alarming, multiple reports show that half of all small businesses have already been breached—often without even the knowledge of company leadership. Sadly, about 60 percent of small businesses affected by these attacks are so damaged that they end up going out of business within six months.

Personally Identifiable Information (PII), including names, addresses, driver’s license numbers, and credit card numbers are all at risk as well as Protected Health Information (PHI), such as medical records. Once an individual’s PII is stolen, it can take years and countless hours of frustration to restore the individual’s good name. A good information technology consultant can help you take simple steps to protect your data from these crimes.

A cyber liability insurance policy can help protect your business financially in the event of an attack. Policies can differ widely and there are no set minimum criteria, so you’ll have to work closely with your agent to find the policy that’s best for your organization. Here are some basic coverage areas to consider:

· Third-party damage covering violations committed by a subcontractor you hire, such as a mail house or fulfillment center

· Business interruption, in the event that damage to your computer systems leaves your company unable to function for some period of time

· Credit monitoring services, allowing customers suffering data exposure to periodically check their credit status

· Disaster recovery costs, which may include expenses for forensic accountants, attorneys, and advisors

· Crisis management, to help contain any bad publicity stemming from the breach

· Social engineering fraud, which can result when hackers trick trusted employees or vendors into disclosing sensitive information

· Extortion, which includes threats by foreign entities that can only be satisfied through large cash payments

Since cyber liability is a fairly new area of insurance and is changing every year, be sure you work with an agent that is sufficiently knowledgeable about this complex field. For more information or to discuss your specific needs, please contact our agency at

info@NesbitAgencies.com or 952-941-9418.